To catch the big fish

More than a year into office at the Bureau of Customs (BOC), Commissioner Ariel Nepomuceno reiterates his resolve to bring down, if not totally eradicate, smuggling in the Philippines. Initially, Nepomuceno put in place internal reforms these past few months since he took office at Aduana in July last year. Moving forward, Nepomuceno announced the BOC will weaponize a new technology-driven campaign to fight the pernicious crimes of smuggling agricultural and fish products, illegal drugs and other contraband.

At the Kapihan sa Manila Bay news forum last Wednesday, Nepomuceno disclosed the BOC’s digitally-aided campaign to run after the smugglers, or RATS as it was previously dubbed by predecessor Customs chiefs before him. Specifically, the BOC is completing the P12-billion Customs Processing System (CPS) project at no cost to the government. Set for pilot-testing in July next year in three key Customs ports of entry, Nepomuceno cited the CPS project was approved for implementation under the Private-Public Partnership (PPP).

The CPS is one of 15 proposed BOC projects aimed at modernizing and digitizing the agency. In broad strokes, Nepomuceno explained the unsolicited PPP project from Crimson Technology of Singapore designed the platform for the BOC to fully digitize import and export transactions using artificial intelligence (AI). He likened the CPS to an automated teller machine (ATM) through which importers and exporters would no longer have to transact directly with Customs officials. Instead, import-export transactions will be done by scan and submission of their documents digitally.

Also at the same time, Nepomuceno echoed anew his call to the 20th Congress to amend Republic Act (RA) 12022, or the Anti-Agricultural Economic Sabotage Act, which created the Anti-Agricultural Economic Sabotage (AAES) Council. This is composed of the Departments of Agriculture (DA); Justice (DOJ); Finance (DOF); Interior and Local Government (DILG); Transportation (DOTr); Trade and Industry (DTI); the Anti-Money Laundering Council (AMLC) and the Philippine Competition Commission (PCC), with representatives from the private sector.

President Ferdinand “Bongbong” Marcos Jr. (PBBM) designated Executive Secretary Ralph Recto as chairman of the AAES Council. As an inter-agency body, it oversees the approved enforcement mechanisms designed to dismantle illegal cartels and large-scale agricultural smuggling operations.

Although the BOC is one of the attached agencies of the DOF, Nepomuceno bewailed the AAES Council set-up prevents the BOC from directly filing smuggling cases in the courts. RA 12022 expressly preserves the powers of the customs bureau to investigate, seize and pursue cases under the Customs Modernization and Tariff Act (CMTA). But the violations and prosecutions under RA 12022 must be pursued by the DOJ and filed exclusively in the Court of Tax Appeals (CTA).

“Smuggling is smuggling, whether it is P10 million or less,” the BOC chief stressed.

He added hastily this was just his “personal” view on the matter to also include not just agricultural products but all products brought illegally into our country. Aside from not paying levies and taxes, Nepomuceno laments the fact that such smuggled products displace Filipino manufacturers and other local producers and hurts especially our farmers and fisherfolk and seriously affects our country’s food security.

In the meantime, Nepomuceno disclosed the BOC and the DOJ, along with the National Bureau of Investigation (NBI), entered into a memorandum of agreement (MOA) last month to strengthen its efforts to go against persons, unscrupulous brokers or groups involved in the smuggling of agricultural and fisheries products. On the part of the BOC, Nepomuceno explained, the agency monitors shipments from the time they arrive in all the 17 principal ports of entry and 34 sub-ports nationwide covering major sea and air cargo terminals.

While waiting for the desired amendment of RA 12022, Nepomuceno pointed out the MOA does not limit the BOC to agricultural smuggling but covers all non-agricultural products. Since he assumed as Customs chief last year, the bureau has already filed 96 cases at the DOJ, of which 42 cases or almost 50 percent were agricultural smuggling cases involving a total of 318 respondents, 154 of whom faced agricultural smuggling charges.

Nepomuceno is the third official to head the BOC under PBBM’s administration. Actually, Nepomuceno is not new to the BOC. He previously served in various positions at the BOC until February 2017. Immediately before being promoted as BOC chief, he was undersecretary of the Department of National Defense and administrator of the Office of Civil Defense. He is a member of Philippine Military Academy Class of 1987 and is a Major  of the Philippine Army Reserve.

When Nepomuceno first came back this time to head the BOC, the agency posted a seven percent decline in collections to P75.7 billion in July last year due to the impact of reduced tariffs, particularly on rice and battery-powered electric vehicles. At present, Nepomuceno is grappling with the impact of suspension of excise tax on LPG, the worsening peso-dollar rate situation and inflation impact on the entire Philippine economy.

Nonetheless, he reported the BOC collected as much as P757 billion from January to September this year, or P55 billion over the target set for the agency despite the lower import volume. He credited the windfall collections to the reforms he instituted at the BOC that helped offset revenue leakages from corruption and other negative economic factors.

“That means we’re winning the war (on corruption) because our (tax) collection is still high. Otherwise, the revenues would not be that high,” the BOC chief stressed.

While the BOC now collects daily between P3 billion to P4.2 billion in revenues, he noted ironically that the agency’s 2027 budget was cut to P5.9 billion under the National Expenditure Program (NEP) submitted by Malacañang. The BOC is asking for additional P10 billion. Fortunately, he noted with much optimism the positive feedback from the budget hearings in the 20th Congress.

Included in the P10-billion additional budget in Nepomuceno’s wish list is acquiring three of the planned 21 sea vessels to beef up BOC border patrols in catching the big fishes of smugglers operating in the Philippine open seas.